What a lot of people get wrong is just because perps funding is going down doesn’t mean shorts are building.

Perps funding is basically the difference between spot activity and perps activity.

So if spot is buying more than perps (ie perps still net long), then perps funding can still be doing DOWN, leading you to falsely believe that shorts are building.

Make sure you look and study carefully before concluding that open interest up, funding down = shorts building up